Ukraine seeks trade deals to east and west
By Oleg Varfolomeyev
Ukraine has been moving closer to both an association and free-trade deal with the European Union, as well as observer status in the Russian-led Customs Union of Russia, Belarus and Kazakhstan. Neither of the two statuses promises full integration. Because of this, Kiev believes they are not mutually exclusive. Ukrainian Foreign Minister Leonid Kozhara has said Ukraine sought to join all the Customs Union agreements that did not contradict its obligations to the EU.
After the release from prison of prominent opposition politician and former Interior Minister Yuriy Lutsenko in April, Ukraine started to receive positive signals from the EU. This culminated in the approval by the European Council, which is the union's collective
presidency, of a visa facilitation agreement on May 13 and of proposals for European Council decisions on the association deal signing on May 15. Although both decisions are technical, their approval is important as it shows that Ukraine is on the right track. The two steps would have been unthinkable last year, when Ukraine-EU relations were in a deep freeze.
The visa facilitation deal should make it easier for Ukrainian journalists, politicians and businessmen to apply for EU travel visas. Ukraine is still far from qualifying for visa-free travel, but the deal encourages certain EU countries to make travel for Ukrainians less difficult. The document approved in Brussels on May 15 is a necessary preparatory step, without which the association and free-trade deal signing would have been impossible next November as scheduled.
In spite of its technical character, the step is seen as recognition of the progress made by Ukraine since the announcement by the EU last December that the association agreement could be signed in November 2013, according to Ukraine's newly appointed foreign relations and integration commissioner, Kostyantyn Yeliseyev.
At the same time, the EU is making it clear that Ukraine has no time to rest on its laurels. Brussels expects Kiev to promptly address the problem of selective justice, pass laws to adapt Ukraine's legal system to EU norms, in particular related to corruption and the justice system, and improve the election system. While Ukrainian and EU officials agree that Ukraine has made some progress in all three areas, this is not enough. EU envoy Jan Tombinski told a conference in Kiev on May 16 that if he were to decide now whether the association agreement would be signed, he would say "no". He called on both the opposition and the ruling party to respect legal rules and procedures and to take more responsibility for their decisions.
Tombinski's skepticism is not surprising. On selective justice, the foreign ministry made it clear recently that former prime minister Yulia Tymoshenko would not be freed from prison; furthermore, the ministry denies that there is a problem of selective justice in Ukraine. At the same time, Foreign Minister Leonid Kozhara admitted that Tymoshenko's imprisonment is the biggest problem in relations with the EU.
Regarding the legal system, Ukraine's National Security and Defense Council Secretary Andriy Klyuyev promised recently that the parliament would pass all the laws required by the EU by the end of May. Finally, regarding the election system, Kiev is not hurrying to amend electoral legislation, and the parliament has thus far failed to schedule repeat elections in the five constituencies where the results of last year's parliamentary elections were cancelled.
The situation with the Russia-Belarus-Kazakhstan Customs Union is less clear. Ukrainian Prime Minister Mykola Azarov said on April 23 that an agreement had been reached in principle that Ukraine would attain observer status in the Customs Union. A month later, the Ukrainian government commissioner for cooperation with Russia and the Commonwealth of Independent States (CIS), Valery Muntyan, said Russia, Kazakhstan and Belarus agreed to give Ukraine observer status in their Eurasian Economic Union (EEU) from January 1, 2015, when the EEU would come into being.
At the same time, he said, Ukraine could not become an observer in the Customs Union as that institution's founding documents did not provide for such a status. However, after meeting with the leaders of Russia and Kazakhstan in Astana on May 29, Ukrainian President Viktor Yanukovych said a memorandum on Ukraine's observer status in the Customs Union would be signed at the upcoming CIS summit in Belarus on May 31. When exactly Ukraine will become an observer remains unknown.
Meanwhile, a poll conducted by the Kiev-based think tank Razumkov on June 20–25 showed that 41.7% of Ukrainians would prefer membership in the EU, while 32.7% would prefer Ukraine to join the Customs Union; 12.3% want both. Whereas the EU attracts Ukrainians by its social protection system, the rule of law, democracy development and financial resources, those who prefer the Customs Union prioritize common history and culture with its other members, the belief in a similar mentality and access to cheap natural resources.
Thus, although in President Viktor Yanukovych's stronghold, the southeast, the Customs Union is more popular, the ruling Party of Regions will have to take public opinion into account if it wants its leader to be re-elected as president in 2015.
Oleg Varfolomeyev is a journalist based in Kiev, Ukraine. He covers economic and political developments in Ukraine and Belarus for analytical network CEEMarketWatch and also writes regularly for a number of other Western sources. He received a Master's degree in Political Science from Central European University in Budapest, Hungary.